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A key part of America's economy has shifted into reverse

America’s services sector is losing steam at a time when it’s highly unclear whether the broader job market will hold steady or result in unexpectedly higher unemployment.

Consumer spending, which makes up about 70% of the US economy, has already moderated over the past few months, government statistics show, and retailers themselves have said they’ve noticed shoppers across the income spectrum change their purchasing behavior. Knightley provided CNN an analysis of government data showing that Americans in the top 20% of earners were responsible for a large share of spending on services related to transportation (air travel and cruises), recreation, food and finance. Health care has been one major bright spot for the services sector, adding jobs at a brisk pace for the past few decades, excluding a drop off in 2020 due to the Covid-19 pandemic, but even then, some businesses in that industry have recently noticed softening demand.

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